THE KEG ROYALTIES INCOME FUND ANNUAL INFORMATION FORM March 31, 2021. TABLE OF CONTENTS GENERAL ..................................................................................................................................................... 1 THE KEG ROYALTIES INCOME FUND ...................................................................................................... 1 The Fund ................................................................................................................................................... 1 The Keg Holdings Trust ............................................................................................................................. 1 The Keg Rights Limited Partnership .......................................................................................................... 2 The Keg GP Ltd. ........................................................................................................................................ 2 Keg Restaurants Ltd. ................................................................................................................................. 2 Business of the Partnership ...................................................................................................................... 2 Structure of the Fund ................................................................................................................................. 4 Ownership of the Fund .............................................................................................................................. 5 RECENT DEVELOPMENTS OF THE FUND ............................................................................................... 6 Change in KRL Ownership ........................................................................................................................ 6 Amendment of Adjustment Date for Roll-ins ............................................................................................. 6 Covid-19 Pandemic ................................................................................................................................... 6 Same Store Sales Growth Reporting ........................................................................................................ 6 Reduction in Distributions to Unitholders .................................................................................................. 6 Deferral of Final Adjustment Date of Januar 1, 2020 Roll-in ..................................................................... 7 Amendment to Term Loan ......................................................................................................................... 7 RECENT ADDITIONS TO THE ROYALTY POOL ....................................................................................... 7 January 1, 2018 Roll-in.............................................................................................................................. 7 January 1, 2019 Roll-in.............................................................................................................................. 8 January 1, 2020 Roll-in.............................................................................................................................. 8 DISTRIBUTIONS .......................................................................................................................................... 8 Revised Diistribution Policy ....................................................................................................................... 9 Distribution Increases ................................................................................................................................ 9 Temporary Distribution Decreases ............................................................................................................ 9 Distributions Paid ..................................................................................................................................... 10 Cumulative Distributions .......................................................................................................................... 10 THE RESTAURANT INDUSTRY ................................................................................................................ 11 The Commercial Foodservice Industry .................................................................................................... 11 The Casual Dining Restaurant Segment ................................................................................................. 12 THE BUSINESS OF KRL ........................................................................................................................... 13 History of the Business ............................................................................................................................ 14 The Keg Concept ..................................................................................................................................... 15 The Keg Operating Strategies ................................................................................................................. 16 Keg Restaurant Locations ....................................................................................................................... 18 Corporate Keg Restaurants and Franchised Keg Restaurants ............................................................... 19 System Sales ........................................................................................................................................... 19 Same Store Sales .................................................................................................................................... 20 Restaurant Trading Weeks ...................................................................................................................... 21 Average Sales per Keg Restaurant ......................................................................................................... 22 Advertising and Marketing ....................................................................................................................... 22 Management Information Systems .......................................................................................................... 23 Purchasing ............................................................................................................................................... 23 Human Resources ................................................................................................................................... 23 Franchise Operations .............................................................................................................................. 24 Growth Strategy ....................................................................................................................................... 25 Management of KRL ................................................................................................................................ 26 Government Regulation........................................................................................................................... 28 Competition ............................................................................................................................................. 29 LICENCE AND ROYALTY ......................................................................................................................... 29 The Licence ............................................................................................................................................. 29 The Royalty ............................................................................................................................................. 30 Operating Covenants of KRL in the Licence and Royalty Agreement .................................................... 31 Adjustment of the Royalty ....................................................................................................................... 31 INFORMATION CONCERNING THE FUND .............................................................................................. 36 Declaration of Trust ................................................................................................................................. 36 Activities of the Fund ............................................................................................................................... 37 Units......................................................................................................................................................... 37 Issuance of Units ..................................................................................................................................... 38 Trustees ................................................................................................................................................... 38 Cash Distributions ................................................................................................................................... 39 Redemption Right .................................................................................................................................... 39 Trust Units ............................................................................................................................................... 41 Notes ......................................................................................................................................................